Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 23, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | WEYERHAEUSER CO | |
Trading Symbol | WY | |
Entity Central Index Key | 106,535 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 757,013,955 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net sales (Note 3) | $ 1,865 | $ 1,693 |
Costs of products sold | 1,348 | 1,272 |
Gross margin | 517 | 421 |
Selling expenses | 23 | 22 |
General and administrative expenses | 78 | 87 |
Research and development expenses | 2 | 4 |
Charges for integration and restructuring, closures and asset impairments (Note 15) | 2 | 13 |
Charges (recoveries) for product remediation (Note 16) | (20) | 0 |
Other operating costs (income), net (Note 17) | 28 | 2 |
Operating income | 404 | 293 |
Non-operating pension and other postretirement benefit costs | (24) | (22) |
Interest income and other | 12 | 9 |
Interest expense, net of capitalized interest | (93) | (99) |
Earnings before income taxes | 299 | 181 |
Income taxes (Note 18) | (30) | (24) |
Net earnings | $ 269 | $ 157 |
Earnings per share, basic and diluted (Note 5) | $ 0.35 | $ 0.21 |
Dividends paid per share | $ 0.32 | $ 0.31 |
Weighted average shares outstanding (in thousands) (Note 5): | ||
Basic | 756,815 | 750,665 |
Diluted | 759,462 | 754,747 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net earnings | $ 269 | $ 157 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (15) | 2 |
Changes in unamortized net pension and other postretirement benefit gain, net of tax expense of $22 and $26 | 54 | 29 |
Changes in unamortized prior service cost, net of tax benefit of $3 and $0 | (1) | (1) |
Changes in unrealized gains on available-for-sale securities (Note 1) | 0 | 1 |
Total other comprehensive income | 38 | 31 |
Total comprehensive income | $ 307 | $ 188 |
CONSOLIDATED STATEMENT OF COMP4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Tax expense (benefit) of actuarial gains (losses) | $ 19 | $ 26 |
Tax expense (benefit) of prior service credits (costs) | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 598 | $ 824 |
Receivables, less discounts and allowances of $1 and $1 | 481 | 396 |
Receivables for taxes | 24 | 14 |
Inventories (Note 6) | 445 | 383 |
Prepaid expenses and other current assets | 118 | 98 |
Current restricted financial investments held by variable interest entities (Note 7) | 253 | 0 |
Total current assets | 1,919 | 1,715 |
Property and equipment, less accumulated depreciation of $3,354 and $3,338 | 1,573 | 1,618 |
Construction in progress | 275 | 225 |
Timber and timberlands at cost, less depletion | 12,888 | 12,954 |
Minerals and mineral rights, less depletion | 306 | 308 |
Goodwill | 40 | 40 |
Deferred tax assets | 244 | 268 |
Other assets | 278 | 316 |
Restricted financial investments held by variable interest entities (Note 7) | 362 | 615 |
Total assets | 17,885 | 18,059 |
Liabilities | ||
Current maturities of long-term debt (Note 10) | 0 | 62 |
Current debt (nonrecourse to the company) held by variable interest entities (Note 7) | 209 | 209 |
Accounts payable | 245 | 249 |
Accrued liabilities (Note 9) | 457 | 645 |
Total current liabilities | 911 | 1,165 |
Long-term debt (Note 10) | 5,928 | 5,930 |
Long-term debt (nonrecourse to the company) held by variable interest entities (Note 7) | 302 | 302 |
Deferred pension and other postretirement benefits (Note 8) | 1,454 | 1,487 |
Other liabilities | 299 | 276 |
Total liabilities | 8,894 | 9,160 |
Commitments and contingencies (Note 12) | ||
Equity: | ||
Common shares: $1.25 par value; authorized 1,360,000 shares; issued and outstanding: 756,699,978 and 755,222,727 shares | 946 | 944 |
Other capital | 8,466 | 8,439 |
Retained earnings | 1,365 | 1,078 |
Accumulated other comprehensive loss (Note 13) | (1,786) | (1,562) |
Total equity | 8,991 | 8,899 |
Total liabilities and equity | $ 17,885 | $ 18,059 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Receivables, allowances | $ 1 | $ 1 |
Property and equipment, accumulated depreciation | $ 3,354 | $ 3,338 |
Common shares, par value | $ 1.25 | $ 1.25 |
Common shares, authorized | 1,360,000,000 | 1,360,000,000 |
Common shares, issued | 756,699,978 | 755,222,727 |
Common shares, outstanding | 756,699,978 | 755,222,727 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operations: | ||
Net earnings | $ 269 | $ 157 |
Noncash charges to earnings: | ||
Depreciation, depletion and amortization | 120 | 133 |
Basis of real estate sold | 12 | 14 |
Deferred income taxes, net | 10 | 3 |
Pension and other postretirement benefits (Note 8) | 34 | 32 |
Share-based compensation expense | 9 | 10 |
Foreign exchange transaction losses (Note 17) | 2 | 3 |
Change in: | ||
Receivables less allowances | (83) | (70) |
Receivable/payable for taxes | 5 | (36) |
Inventories | (66) | (28) |
Prepaid expenses | (5) | (9) |
Accounts payable and accrued liabilities | (173) | (137) |
Pension and postretirement benefit contributions and payments | (16) | (22) |
Other | 18 | (15) |
Net cash from operations | 136 | 35 |
Cash flows from investing activities: | ||
Capital expenditures for property and equipment | (61) | (52) |
Capital expenditures for timberlands reforestation | (20) | (23) |
Proceeds from sale of nonstrategic assets | 2 | 8 |
Other | 3 | (1) |
Net cash used in investing activities | (76) | (68) |
Cash flows from financing activities: | ||
Cash dividends on common shares | (242) | (233) |
Payments of long-term debt (Note 10) | (62) | 0 |
Proceeds from exercise of stock options | 25 | 55 |
Other | (7) | (10) |
Net cash used in financing activities | (286) | (188) |
Net change in cash and cash equivalents | (226) | (221) |
Cash and cash equivalents at beginning of period | 824 | 676 |
Cash and cash equivalents at end of period | 598 | 455 |
Cash paid during the period for: | ||
Interest, net of amount capitalized of $3 and $3 | 105 | 120 |
Income taxes | $ 17 | $ 59 |
CONSOLIDATED STATEMENT OF CASH8
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest, amount capitalized | $ 3 | $ 3 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We are a corporation that has elected to be taxed as a real estate investment trust (REIT). We expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber. As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our taxable REIT subsidiaries (TRSs), which includes our Wood Products segment and portions of our Timberlands and Real Estate, Energy and Natural Resources (Real Estate & ENR) segments. Our consolidated financial statements provide an overall view of our results of operations and financial condition. They include our accounts and the accounts of entities we control, including: • majority-owned domestic and foreign subsidiaries and • variable interest entities in which we are the primary beneficiary. They do not include our intercompany transactions and accounts, which are eliminated. We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates. Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we,” “the company” and “our” refer to the consolidated company. The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. Certain information and footnote disclosures normally included in our annual Consolidated Financial Statements have been condensed or omitted. These quarterly Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2017 . Results of operations for interim periods should not necessarily be regarded as indicative of the results that may be expected for the full year. NEW ACCOUNTING PRONOUNCEMENTS Leases In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt on January 1, 2019. We are still evaluating certain aspects of the revised guidance and subsequent revisions either made or being contemplated by the FASB, including application of the available practical expedients. We expect the adoption to result in the recognition of the present value of the future commitments on operating leases on our Consolidated Balance Sheet . Reclassification of Certain Amounts from Accumulated Other Comprehensive Loss In February 2018, the FASB issued ASU 2018-02, which allows for the reclassification of certain income tax effects related to the Tax Cuts and Jobs Act (the "Tax Act") between “Accumulated other comprehensive loss” and “Retained earnings.” This ASU provides that adjustments to deferred tax liabilities and assets related to a change in tax laws be included in “Income from continuing operations”, even in situations where the related items were originally recognized in “Other comprehensive income.” The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws was recognized. We adopted this ASU during first quarter 2018 using the period of adoption method, which resulted in a reclassification of $253 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet due to changes in federal statutory and effective state rates. In general, tax effects unrelated to the Tax Cuts and Jobs Act are released from accumulated other comprehensive loss using the portfolio approach. In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. We adopted ASU 2016-01 in first quarter 2018, which resulted in a reclassification of accumulated unrealized gains on available-for-sale securities of $9 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet . |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Mar. 31, 2018 | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Reportable business segments are determined based on the company’s "management approach," as defined by FASB ASC 280, “Segment Reporting.” The management approach is based on the way the chief operating decision maker organizes the segments within a company for making decisions about resources to be allocated and assessing their performance. We are principally engaged in growing and harvesting timber; manufacturing, distributing, and selling products made from trees; maximizing the value of every acre we own through the sale of higher and better use (HBU) properties; and monetizing reserves of minerals, oil, gas, coal, and other natural resources on our timberlands. The following is a brief description of each of our reportable business segments and activities: • Timberlands – which includes logs, timber and leased recreational access; • Real Estate & ENR – which includes sales of timberlands; rights to explore for and extract hard minerals, oil and gas production and coal; and equity interests in our Real Estate Development Ventures; and • Wood Products – which includes softwood lumber, engineered wood products, structural panels, medium density fiberboard and building materials distribution. A reconciliation of our business segment information to the respective information in the Consolidated Statement of Operations is as follows: QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Sales to unaffiliated customers (Note 3) : Timberlands $ 505 $ 486 Real Estate & ENR 51 53 Wood Products 1,309 1,154 1,865 1,693 Intersegment sales: Timberlands 228 202 Total sales 2,093 1,895 Intersegment eliminations (228 ) (202 ) Total $ 1,865 $ 1,693 Net contribution to earnings: Timberlands $ 189 $ 148 Real Estate & ENR (1) 25 26 Wood Products 270 172 484 346 Unallocated items (2) (92 ) (66 ) Net contribution to earnings 392 280 Interest expense, net of capitalized interest (93 ) (99 ) Earnings before income taxes 299 181 Income taxes (30 ) (24 ) Net earnings $ 269 $ 157 (1) The Real Estate & ENR segment includes the equity earnings from investments in and advances to our Real Estate Development Ventures, which are accounted for under the equity method. (2) Unallocated items are gains or charges not related to, or allocated to, an individual operating segment. They include a portion of items such as: share-based compensation expenses, pension and postretirement costs, foreign exchange transaction gains and losses and the elimination of intersegment profit in inventory and LIFO. |
OPERATIONS DIVESTED OPERATIONS
OPERATIONS DIVESTED OPERATIONS DIVESTED | 3 Months Ended |
Mar. 31, 2018 | |
OPERATIONS DIVESTED | OPERATIONS DIVESTED On October 12, 2016, we announced the exploration of strategic alternatives for our Uruguay timberlands and manufacturing operations, which was part of our Timberlands business segment. On June 2, 2017, the Weyerhaeuser Board of Directors approved an equity purchase agreement with a consortium led by BTG Pactual's Timberland Investment Group (TIG), including other long-term investors, pursuant to which the Company agreed to sell, in exchange for $403 million in cash, all of its equity interest in the subsidiaries that collectively owned and operated its Uruguayan timberlands and manufacturing operations. On September 1, 2017, we completed the sale of our Uruguay timberlands and manufacturing operations for approximately $403 million of cash proceeds. Due to the $147 million impairment of our Uruguayan operations recorded during second quarter 2017, no material gain or loss was recorded as a result of this sale. The sale of our Uruguayan operations was not considered a strategic shift that had or will have a major effect on our operations or financial results, and therefore did not meet the requirements for presentation as discontinued operations. |
REVENUE (Notes)
REVENUE (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE A majority of our revenue is derived from sales of delivered logs and manufactured wood products. We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , which we adopted on January 1, 2018, using the cumulative effect method. The adoption of the new revenue recognition guidance did not materially impact our Consolidated Statement of Operations , Consolidated Balance Sheet , or Consolidated Statement of Cash Flows . PERFORMANCE OBLIGATIONS A performance obligation, as defined in ASC Topic 606, is a promise in a contract to transfer a distinct good or service to a customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue at the point in time, or over the period, in which the performance obligation is satisfied. Performance obligations associated with delivered log sales are typically satisfied when the logs are delivered to our customers’ mills or delivered to an ocean vessel in the case of export sales. Performance obligations associated with the sale of wood products are typically satisfied when the products are shipped. Customers are generally invoiced shortly after logs are delivered or after wood products are shipped, with payment generally due within a month or less of the invoice date. ASC Topic 606 requires entities to consider significant financing components of contracts with customers, though allows for the use of a practical expedient when the period between satisfaction of a performance obligation and payment receipt is one year or less. Given the nature of our revenue transactions, we have elected to utilize this practical expedient. Performance obligations associated with real estate sales are generally met when placed into escrow and all conditions of closing have been satisfied. CONTRACT ESTIMATES Substantially all of the company’s performance obligations are satisfied as of a point in time. Therefore, there is little judgment in determining when control transfers for our business segments as described above. The transaction price for log sales generally equals the amount billed to our customer for logs delivered during the accounting period. For the limited number of log sales subject to a long-term supply agreement, the transaction price is variable but is known at the time of billing. For wood products sales, the transaction price is generally the amount billed to the customer for the products shipped but may be reduced slightly for estimated cash discounts and rebates. There are no significant contract estimates related to the real estate business. CONTRACT BALANCES In general, customers are billed and a receivable is recorded as we ship and/or deliver wood products and logs. We generally receive payment shortly after products have been received by our customers. Contract asset and liability balances are immaterial. For real estate sales, the company receives the entire consideration in cash at closing. MAJOR PRODUCTS A reconciliation of revenue recognized by our major products: QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Net sales: Timberlands Segment Delivered logs (1) : West Domestic sales $ 137 $ 119 Export sales 129 106 Subtotal West 266 225 South 157 148 North 25 27 Other 14 20 Subtotal delivered logs sales 462 420 Stumpage and pay-as-cut timber 15 12 Recreational and other lease revenue 14 14 Other (2) 14 40 Net sales attributable to Timberlands segment 505 486 Real Estate & ENR Segment Real estate 34 37 Energy and natural resources 17 16 Net sales attributable to Real Estate & ENR segment 51 53 Wood Products Segment Structural lumber 569 478 Engineered solid section 129 117 Engineered I-joists 78 73 Oriented strand board 232 203 Softwood plywood 50 44 Medium density fiberboard 43 47 Complementary building products 137 122 Other 71 70 Net sales attributable to Wood Products segment 1,309 1,154 Total net sales $ 1,865 $ 1,693 (1) The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks Venture. Our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017. (2) Other Timberlands sales include sales of seeds and seedlings, chips, as well as sales from our former Uruguayan operations (sold during third quarter 2017). Our former Uruguayan operations included logs, plywood and hardwood lumber harvested or produced. Refer to Note 4: Operations Divested for further information. |
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
NET EARNINGS PER SHARE | NET EARNINGS PER SHARE Our basic and diluted earnings per share were: • $0.35 during first quarter 2018 and • $0.21 during first quarter 2017 . Basic earnings per share is net earnings divided by the weighted average number of our outstanding common shares, including stock equivalent units where there is no circumstance under which those shares would not be issued. Diluted earnings per share is net earnings divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares: QUARTER ENDED SHARES IN THOUSANDS MARCH 2018 MARCH 2017 Weighted average common shares outstanding – basic 756,815 750,665 Dilutive potential common shares: Stock options 1,682 2,981 Restricted stock units 569 547 Performance share units 396 554 Total effect of outstanding dilutive potential common shares 2,647 4,082 Weighted average common shares outstanding – dilutive 759,462 754,747 We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied. Potential Shares Not Included in the Computation of Diluted Earnings per Share The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods. QUARTER ENDED SHARES IN THOUSANDS MARCH 2018 MARCH 2017 Stock options 1,301 1,432 Performance share units 744 568 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2018 | |
INVENTORIES | INVENTORIES Inventories include raw materials, work-in-process, finished goods, and materials and supplies. DOLLAR AMOUNTS IN MILLIONS MARCH 31, DECEMBER 31, LIFO inventories: Logs $ 19 $ 17 Lumber, plywood, panels and fiberboard 76 66 Other products 16 10 FIFO or moving average cost inventories: Logs 64 38 Lumber, plywood, panels, fiberboard and engineered wood products 109 91 Other products 77 77 Materials and supplies 84 84 Total $ 445 $ 383 LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. locations. The FIFO – the first-in, first-out method – or moving average cost methods apply to the balance of our U.S. raw material and product inventories, all material and supply inventories and all foreign inventories. If we used FIFO for all LIFO inventories, our stated inventories would have been higher by $70 million as of March 31, 2018 , and $70 million as of December 31, 2017 . |
SPECIAL-PURPOSE ENTITIES SPECIA
SPECIAL-PURPOSE ENTITIES SPECIAL-PURPOSE ENTITIES | 3 Months Ended |
Mar. 31, 2018 | |
SPECIAL PURPOSE ENTITIES | From 2002 through 2004, we sold certain nonstrategic timberlands in five separate transactions. We are the primary beneficiary and consolidate the assets and liabilities of certain monetization and buyer-sponsored Special-purpose entities (SPEs) involved in these transactions. We have an equity interest in the monetization SPEs, but no ownership interest in the buyer-sponsored SPEs. The long-term notes of our monetization SPEs and the financial investments of our buyer-sponsored SPEs include $209 million and $253 million scheduled to mature in fourth quarter 2018 and first quarter 2019, respectively. We have classified the long-term notes scheduled to mature in fourth quarter 2018 as current liabilities and the financial investments scheduled to mature in first quarter 2019 as current receivables on our Consolidated Balance Sheet . |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2018 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The components of net periodic benefit costs are: PENSION QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Service cost $ 10 $ 10 Interest cost 60 66 Expected return on plan assets (100 ) (102 ) Amortization of actuarial loss 61 55 Amortization of prior service cost 1 1 Total net periodic benefit cost - pension $ 32 $ 30 OTHER POSTRETIREMENT BENEFITS QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Interest cost $ 2 $ 2 Amortization of actuarial loss 2 2 Amortization of prior service credit (2 ) (2 ) Total net periodic benefit cost - other postretirement benefits $ 2 $ 2 For the periods presented, Service cost is included in "Cost of products sold," "Selling expenses," and "General and administrative expenses" and the remaining other items are included in "Non-operating pension and other postretirement benefit costs." Refer to the Consolidated Statement of Operations . FAIR VALUE OF PENSION PLAN ASSETS AND OBLIGATIONS We estimate the fair value of pension plan assets based upon the information available during the year-end reporting process. In some cases, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We update the year-end estimated fair value of pension plan assets to incorporate year-end net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. We expect to complete the valuation of our pension plan assets during the second quarter 2018 . EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS In 2018 we expect to: • be required to contribute approximately $23 million for our Canadian registered plan; • be required to contribute or make benefit payments for our Canadian nonregistered plans of $4 million ; • make benefit payments of $19 million for our U.S. nonqualified pension plans; and • make benefit payments of $19 million for our U.S. and Canadian other postretirement plans. We do not anticipate being required to make a contribution to our U.S. qualified pension plans in 2018 . |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2018 | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities were comprised of the following: DOLLAR AMOUNTS IN MILLIONS MARCH 31, DECEMBER 31, Accrued income taxes $ — $ 19 Customer rebates and volume discounts 32 48 Deferred income 31 48 Interest 84 111 Pension and other postretirement benefits 40 40 Product remediation accrual (Note 16) 43 98 Taxes – Social Security and real and personal property 27 24 Vacation pay 35 33 Wages, salaries and severance pay 86 150 Other 79 74 Total $ 457 $ 645 |
LONG-TERM DEBT AND LINES OF CRE
LONG-TERM DEBT AND LINES OF CREDIT LONG-TERM DEBT AND LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2018 | |
LONG-TERM DEBT AND LINES OF CREDIT | LONG-TERM DEBT AND LINES OF CREDIT During first quarter 2018, we paid our $62 million 7.00 percent debenture at maturity. During March 2017, we entered into a new $1.5 billion five-year senior unsecured revolving credit facility that expires in March 2022 . This replaced a $1.0 billion senior unsecured revolving credit facility that was set to expire September 2018 . The entire amount is available to Weyerhaeuser Company. Interest on borrowings are at LIBOR plus a spread or at other interest rates mutually agreed upon between the borrower and the lending banks. As of March 31, 2018 , there were no borrowings outstanding. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair values and carrying values of our long-term debt consisted of the following: MARCH 31, DECEMBER 31, DOLLAR AMOUNTS IN MILLIONS CARRYING VALUE FAIR VALUE (LEVEL 2) CARRYING VALUE FAIR VALUE (LEVEL 2) Long-term debt (including current maturities) (1) : Fixed rate $ 5,704 $ 6,568 $ 5,768 $ 6,823 Variable rate 224 225 224 225 Total debt $ 5,928 $ 6,793 $ 5,992 $ 7,048 (1) Excludes nonrecourse debt held by our Variable Interest Entities (VIEs). To estimate the fair value of fixed rate long-term debt, we used the following valuation approaches: • market approach – based on quoted market prices we received for the same types and issues of our debt; or • income approach – based on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. We believe that our variable rate long-term debt instruments have net carrying values that approximate their fair values with only insignificant differences. The inputs to these valuations are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS We believe that our other financial instruments, including cash and cash equivalents, short-term investments, mutual fund investments held in grantor trusts, receivables, and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts. |
LEGAL PROCEEDINGS, COMMITMENTS
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES LEGAL PROCEEDINGS We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our Consolidated Balance Sheet , Consolidated Statement of Operations , or Consolidated Statement of Cash Flows . See Note 18: Income Taxes for a discussion of a tax proceeding involving Plum Creek's 2008 U.S. federal income tax return. ENVIRONMENTAL MATTERS Site Remediation Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) – commonly known as the Superfund – and similar state laws, we: • are a party to various proceedings related to the cleanup of hazardous waste sites and • have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated. We have received notification from the Environmental Protection Agency (the EPA) and have acknowledged that we are a potentially responsible party in a portion of the Kalamazoo River Superfund site in southwest Michigan. Our involvement in the remediation site is based on our former ownership of the Plainwell, Michigan mill located within the remediation site. Several other companies also have been deemed potentially responsible parties as past or present owners or operators of facilities within the site, or as arrangers under CERCLA. We are currently cooperating with other parties to jointly implement an administrative order issued by the EPA on April 14, 2016, with respect to a portion of the site comprising a stretch of the river approximately 1.7 miles long referred to as the Otsego Township Dam Area. We do not expect to incur material losses related to the implementation of this administrative order. In 2010, the company, along with others, was named as a defendant by Georgia-Pacific Consumer Products LP, Fort James Corporation and Georgia-Pacific LLC in an action seeking contribution under CERCLA for remediation costs relating to a certain area within the site. On March 29, 2018, the U.S. District Court issued an opinion and order assigning the company responsibility for five percent of approximately $50 million in past costs incurred by the plaintiffs. The remaining ninety-five percent of this pool of past costs incurred was allocated to the plaintiffs and other defendants. The opinion and order does not establish allocation for future remediation costs, and accordingly, we may incur additional costs in connection with future remediation tasks for other areas of the site. In connection with the opinion and order, we have updated our assessment of the company’s reasonably possible estimated liability associated with the site and have recorded a pretax charge of $28 million in the first quarter as "Other operating costs, net" on the Consolidated Statement of Operations . As of March 31, 2018 , our total accrual for future estimated remediation costs on the active Superfund sites and other sites for which we are potentially responsible was approximately $72 million . These amounts are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet . Asset Retirement Obligations We have obligations associated with the future retirement of tangible long-lived assets consisting primarily of reforestation obligations related to forest management licenses in Canada and obligations to close and cap landfills. As of March 31, 2018 , our accrued balance for these obligations was $34 million . These obligations are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet . The accruals have not changed materially since the end of 2017 . Some of our sites have materials containing asbestos. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when materials containing asbestos might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated. PRODUCT REMEDIATION In July 2017, the company announced it was implementing a solution to address concerns regarding our TJI® Joists with Flak Jacket® Protection product. The company has determined that an odor in certain newly constructed homes is related to a recent formula change to the Flak Jacket coating that included a formaldehyde-based resin. This issue is isolated to Flak Jacket product manufactured after December 1, 2016, and does not affect any of the company’s other products. We recorded pretax charges of $290 million to accrue for remediation costs in the year-to-date period ended December 31, 2017 . We received insurance recoveries of $20 million during the quarter ended March 31, 2018 . Refer to Note 16: Charges (Recoveries) for Product Remediation for further information. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | OTHER COMPREHENSIVE LOSS Changes in amounts included in our accumulated other comprehensive loss by component are: PENSION OTHER POSTRETIREMENT BENEFITS DOLLAR AMOUNTS IN MILLIONS Foreign currency translation adjustments Actuarial loss Prior service cost Actuarial loss Prior service credit Unrealized gains on available-for-sale securities Total Beginning balance as of December 31, 2017 $ 264 $ (1,802 ) $ (8 ) $ (48 ) $ 23 $ 9 $ (1,562 ) Other comprehensive income (loss) before reclassifications (15 ) 10 — — — — (5 ) Income taxes — (2 ) — — — — (2 ) Net other comprehensive income (loss) before reclassifications (15 ) 8 — — — — (7 ) Amounts reclassified from accumulated other comprehensive loss (1) — 61 1 2 (2 ) — 62 Income taxes — (16 ) — (1 ) — — (17 ) Net amounts reclassified from accumulated other comprehensive loss to earnings — 45 1 1 (2 ) — 45 Total other comprehensive income (loss) (15 ) 53 1 1 (2 ) — 38 Reclassification of certain tax affects due to tax law changes (2) — (245 ) (1 ) (12 ) 5 — (253 ) Reclassification of accumulated unrealized gains on available-for-sale securities (3) — — — — — (9 ) (9 ) Net amounts reclassified from accumulated other comprehensive loss to retained earnings — (245 ) (1 ) (12 ) 5 (9 ) (262 ) Ending balance as of March 31, 2018 $ 249 $ (1,994 ) $ (8 ) $ (59 ) $ 26 $ — $ (1,786 ) (1) Amortization of actuarial loss and prior service (cost) credit are components of net periodic benefit cost (credit). See Note 8: Pension and Other Postretirement Benefit Plans . (2) We reclassified certain tax affects from tax law changes of $253 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet in accordance with ASU 2018-02. See Note 1: Basis of Presentation . (3) We reclassified accumulated unrealized gains from available-for-sale securities of $9 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet in accordance with ASU 2016-01. See Note 1: Basis of Presentation . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-based compensation activity in first quarter 2018 included the following: SHARES IN THOUSANDS Granted Vested Restricted Stock Units (RSUs) 673 576 Performance Share Units (PSUs) 344 110 A total of 1.5 million shares of common stock were issued as a result of RSU vestings, PSU vestings and stock option exercises. RESTRICTED STOCK UNITS The weighted average fair value of the RSUs granted in 2018 was $34.14 . The vesting provisions for RSUs granted in 2018 were as follows: • vest ratably over four years; • immediately vest in the event of death while employed or disability; • continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one-year anniversary of the grant; • continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met; and • will be entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62. PERFORMANCE SHARE UNITS The weighted average grant date fair value of PSUs granted in 2018 was $35.49 . The final number of shares granted in 2018 will range from 0 percent to 150 percent of each grant's target, depending upon actual company performance. The ultimate number of PSUs earned is based on two measures: • our relative total shareholder return (TSR) ranking measured against the S&P 500 over a three year period and • our relative TSR ranking measured against an industry peer group of companies over a three year period. The vesting provisions for PSUs granted in 2018 were as follows: • vest 100 percent on the third anniversary of the grant date if the individual remains employed by the company; • fully vest in the event the participant dies or becomes disabled while employed; • continue to vest upon retirement at an age of at least 62, but a portion of the grant is forfeited if retirement occurs before the one year anniversary of the grant; • continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met and the employee has met the second anniversary of the grant date; and • will be entirely forfeited upon termination of employment in all other situations including early retirement prior to age 62. Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2018 Performance Share Units Performance period 1/1/2018 – 12/31/2020 Valuation date average stock price (1) $34.14 Expected dividends 3.81% Risk-free rate 1.75 % – 2.34% Expected volatility 17.30 % – 21.52% (1) Calculated as an average of the high and low prices on grant date. VALUE MANAGEMENT AWARDS Value Management Awards (VMAs) are relative performance equity incentive awards granted to certain former employees of Plum Creek and assumed by the company in connection with the Plum Creek merger. In accordance with the terms of the merger, all VMAs outstanding on December 31, 2017, vested at “target” level performance of $100 per unit and were paid out in full in first quarter of 2018. |
CHARGES FOR INTEGRATION AND RES
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS | CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Integration and restructuring charges related to our merger with Plum Creek $ — $ 12 Charges related to closures and other restructuring activities 1 1 Impairments of long-lived assets 1 — Total charges for integration and restructuring, closures and asset impairments $ 2 $ 13 |
CHARGES (RECOVERIES) FOR PRODUC
CHARGES (RECOVERIES) FOR PRODUCT REMEDIATION (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
CHARGES (RECOVERIES) FOR PRODUCT REMEDIATION | CHARGES (RECOVERIES) FOR PRODUCT REMEDIATION In July 2017, we announced we were implementing a solution to address concerns regarding our TJI® Joists with Flak Jacket® Protection product. This issue was isolated to Flak Jacket product manufactured after December 1, 2016, and does not affect any of our other products. We estimate that approximately 2,400 homes were affected. We recorded pretax charges of $290 million in the year-to-date period ended December 31, 2017, to accrue for expected costs associated with the remediation. During first quarter 2018, we received and recorded insurance recoveries of $20 million . The charges and recoveries are attributable to our Wood Products segment and were recorded in "Charges (recoveries) for product remediation," on the Consolidated Statement of Operations. As of March 31, 2018 , $247 million has been paid out in relation to our remediation efforts. The remaining accrual of $43 million is recorded in "Accrued liabilities" on the Consolidated Balance Sheet . The company ultimately expects a significant portion of the total expense will be covered by insurance. As of March 31, 2018 , $20 million has been received and recorded for insurance recoveries. |
OTHER OPERATING COSTS, NET
OTHER OPERATING COSTS, NET | 3 Months Ended |
Mar. 31, 2018 | |
OTHER OPERATING COSTS, NET | OTHER OPERATING COSTS, NET Other operating costs, net: • includes both recurring and occasional income and expense items and • can fluctuate from year to year. ITEMS INCLUDED IN OTHER OPERATING COSTS, NET QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Gain on disposition of nonstrategic assets $ (2 ) $ (7 ) Foreign exchange losses, net 2 3 Litigation expense, net 5 3 Other, net (1) 23 3 Total other operating costs, net $ 28 $ 2 (1) "Other, net" includes environmental remediation charges. See Note 12: Legal Proceedings, Commitments, and Contingencies for more information. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
INCOME TAXES | INCOME TAXES As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned TRSs, which includes our Wood Products segment and portions of our Timberlands and Real Estate & ENR segments' earnings. The quarterly provision for income taxes is based on the current estimate of the annual effective tax rate. Our 2018 estimated annual effective tax rate for our TRSs is approximately 24 percent , which is higher than the U.S. domestic statutory federal tax rate primarily due to higher foreign tax rates applicable to foreign earnings and state income taxes. TAX LEGISLATION On December 22, 2017, H.R. 1, commonly known as the Tax Cuts and Jobs Act (the "Tax Act"), was enacted. The Tax Act contains significant changes to corporate taxation, including the reduction of the corporate tax rate from 35 percent to 21 percent . As a result of the reduction in the corporate tax rate, we revalued our deferred tax assets and liabilities and recorded a tax expense of $74 million during 2017, which reduced our net deferred tax asset. The deemed repatriation on deferred foreign income provisions does not impact our operations due to the fact that we have no foreign undistributed earnings. The impact of the Tax Act provisions effective in 2018 is a reduction to our overall estimated annual effective tax rate primarily due to the reduced corporate tax rate. During first quarter 2018, we adopted ASU 2018-02 which allows for the reclassification of certain income tax effects related to the Tax Act between accumulated other comprehensive income and retained earnings. Refer to Note 1: Basis of Presentation for further details on this ASU and the related impact on our financial statements. ONGOING IRS MATTER In connection with the merger with Plum Creek, we acquired equity interests in Southern Diversified Timber, LLC, a timberland joint venture (Timberland Venture) with an affiliate of Campbell Global LLC (TCG Member). On August 31, 2016, the Timberland Venture redeemed TCG Member's interest and became a fully consolidated, wholly-owned subsidiary of Weyerhaeuser. We received a Notice of Final Partnership Administrative Adjustment (FPAA), dated July 20, 2016, from the Internal Revenue Service (IRS) in regard to Plum Creek's 2008 U.S. federal income tax treatment of the transaction forming the Timberland Venture. The IRS is asserting that the transfer of the timberlands to the Timberland Venture was a taxable transaction to Plum Creek at the time of the transfer rather than a nontaxable capital contribution. We have filed a petition in the U.S. Tax Court and will vigorously contest this adjustment. In the event that we are unsuccessful in this tax litigation, we could be required to recognize and distribute gain to shareholders of approximately $600 million and pay built-in gains tax of approximately $100 million . We would also be required to pay interest on both of those amounts, which would be substantial. As much as 80 percent of any such gain distribution could be made with our common stock, and shareholders would be subject to tax on the distribution at the applicable capital gains tax rate. Alternatively, we could elect to retain the gain and pay corporate-level tax to minimize interest costs to the company. Although the outcome of this process cannot be predicted with certainty, we are confident in our position based on U.S. tax law and believe we will be successful in defending it. Accordingly, no reserve has been recorded related to this matter. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Consolidation, Policy | Our consolidated financial statements provide an overall view of our results of operations and financial condition. They include our accounts and the accounts of entities we control, including: • majority-owned domestic and foreign subsidiaries and • variable interest entities in which we are the primary beneficiary. They do not include our intercompany transactions and accounts, which are eliminated. We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates. |
New Accounting Pronouncements, Policy | NEW ACCOUNTING PRONOUNCEMENTS Leases In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt on January 1, 2019. We are still evaluating certain aspects of the revised guidance and subsequent revisions either made or being contemplated by the FASB, including application of the available practical expedients. We expect the adoption to result in the recognition of the present value of the future commitments on operating leases on our Consolidated Balance Sheet . Reclassification of Certain Amounts from Accumulated Other Comprehensive Loss In February 2018, the FASB issued ASU 2018-02, which allows for the reclassification of certain income tax effects related to the Tax Cuts and Jobs Act (the "Tax Act") between “Accumulated other comprehensive loss” and “Retained earnings.” This ASU provides that adjustments to deferred tax liabilities and assets related to a change in tax laws be included in “Income from continuing operations”, even in situations where the related items were originally recognized in “Other comprehensive income.” The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws was recognized. We adopted this ASU during first quarter 2018 using the period of adoption method, which resulted in a reclassification of $253 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet due to changes in federal statutory and effective state rates. In general, tax effects unrelated to the Tax Cuts and Jobs Act are released from accumulated other comprehensive loss using the portfolio approach. In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. We adopted ASU 2016-01 in first quarter 2018, which resulted in a reclassification of accumulated unrealized gains on available-for-sale securities of $9 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet . |
Revenue Recognition, Policy | PERFORMANCE OBLIGATIONS A performance obligation, as defined in ASC Topic 606, is a promise in a contract to transfer a distinct good or service to a customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue at the point in time, or over the period, in which the performance obligation is satisfied. Performance obligations associated with delivered log sales are typically satisfied when the logs are delivered to our customers’ mills or delivered to an ocean vessel in the case of export sales. Performance obligations associated with the sale of wood products are typically satisfied when the products are shipped. Customers are generally invoiced shortly after logs are delivered or after wood products are shipped, with payment generally due within a month or less of the invoice date. ASC Topic 606 requires entities to consider significant financing components of contracts with customers, though allows for the use of a practical expedient when the period between satisfaction of a performance obligation and payment receipt is one year or less. Given the nature of our revenue transactions, we have elected to utilize this practical expedient. Performance obligations associated with real estate sales are generally met when placed into escrow and all conditions of closing have been satisfied. CONTRACT ESTIMATES Substantially all of the company’s performance obligations are satisfied as of a point in time. Therefore, there is little judgment in determining when control transfers for our business segments as described above. The transaction price for log sales generally equals the amount billed to our customer for logs delivered during the accounting period. For the limited number of log sales subject to a long-term supply agreement, the transaction price is variable but is known at the time of billing. For wood products sales, the transaction price is generally the amount billed to the customer for the products shipped but may be reduced slightly for estimated cash discounts and rebates. There are no significant contract estimates related to the real estate business. CONTRACT BALANCES In general, customers are billed and a receivable is recorded as we ship and/or deliver wood products and logs. We generally receive payment shortly after products have been received by our customers. Contract asset and liability balances are immaterial. |
Earnings Per Share, Policy | We use the treasury stock method to calculate the dilutive effect of our outstanding stock options, restricted stock units and performance share units. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied. |
Fair Value of Financial Instruments, Policy | To estimate the fair value of fixed rate long-term debt, we used the following valuation approaches: • market approach – based on quoted market prices we received for the same types and issues of our debt; or • income approach – based on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. We believe that our variable rate long-term debt instruments have net carrying values that approximate their fair values with only insignificant differences. The inputs to these valuations are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date. |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
A reconciliation of Revenue from Segments to Consolidated | A reconciliation of our business segment information to the respective information in the Consolidated Statement of Operations is as follows: QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Sales to unaffiliated customers (Note 3) : Timberlands $ 505 $ 486 Real Estate & ENR 51 53 Wood Products 1,309 1,154 1,865 1,693 Intersegment sales: Timberlands 228 202 Total sales 2,093 1,895 Intersegment eliminations (228 ) (202 ) Total $ 1,865 $ 1,693 Net contribution to earnings: Timberlands $ 189 $ 148 Real Estate & ENR (1) 25 26 Wood Products 270 172 484 346 Unallocated items (2) (92 ) (66 ) Net contribution to earnings 392 280 Interest expense, net of capitalized interest (93 ) (99 ) Earnings before income taxes 299 181 Income taxes (30 ) (24 ) Net earnings $ 269 $ 157 (1) The Real Estate & ENR segment includes the equity earnings from investments in and advances to our Real Estate Development Ventures, which are accounted for under the equity method. (2) Unallocated items are gains or charges not related to, or allocated to, an individual operating segment. They include a portion of items such as: share-based compensation expenses, pension and postretirement costs, foreign exchange transaction gains and losses and the elimination of intersegment profit in inventory and LIFO. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from External Customer [Line Items] | |
Revenue by Major Products | MAJOR PRODUCTS A reconciliation of revenue recognized by our major products: QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Net sales: Timberlands Segment Delivered logs (1) : West Domestic sales $ 137 $ 119 Export sales 129 106 Subtotal West 266 225 South 157 148 North 25 27 Other 14 20 Subtotal delivered logs sales 462 420 Stumpage and pay-as-cut timber 15 12 Recreational and other lease revenue 14 14 Other (2) 14 40 Net sales attributable to Timberlands segment 505 486 Real Estate & ENR Segment Real estate 34 37 Energy and natural resources 17 16 Net sales attributable to Real Estate & ENR segment 51 53 Wood Products Segment Structural lumber 569 478 Engineered solid section 129 117 Engineered I-joists 78 73 Oriented strand board 232 203 Softwood plywood 50 44 Medium density fiberboard 43 47 Complementary building products 137 122 Other 71 70 Net sales attributable to Wood Products segment 1,309 1,154 Total net sales $ 1,865 $ 1,693 (1) The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and managed Twin Creeks Venture. Our management agreement for the Twin Creeks Venture began in April 2016 and terminated in December 2017. (2) Other Timberlands sales include sales of seeds and seedlings, chips, as well as sales from our former Uruguayan operations (sold during third quarter 2017). Our former Uruguayan operations included logs, plywood and hardwood lumber harvested or produced. Refer to Note 4: Operations Divested for further information. |
NET EARNINGS PER SHARE (Tables)
NET EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Dilutive Potential Common Shares | Diluted earnings per share is net earnings divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares: QUARTER ENDED SHARES IN THOUSANDS MARCH 2018 MARCH 2017 Weighted average common shares outstanding – basic 756,815 750,665 Dilutive potential common shares: Stock options 1,682 2,981 Restricted stock units 569 547 Performance share units 396 554 Total effect of outstanding dilutive potential common shares 2,647 4,082 Weighted average common shares outstanding – dilutive 759,462 754,747 |
Potential Shares Not Included in the Computation of Diluted Earnings per Share | Potential Shares Not Included in the Computation of Diluted Earnings per Share The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods. QUARTER ENDED SHARES IN THOUSANDS MARCH 2018 MARCH 2017 Stock options 1,301 1,432 Performance share units 744 568 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | Inventories include raw materials, work-in-process, finished goods, and materials and supplies. DOLLAR AMOUNTS IN MILLIONS MARCH 31, DECEMBER 31, LIFO inventories: Logs $ 19 $ 17 Lumber, plywood, panels and fiberboard 76 66 Other products 16 10 FIFO or moving average cost inventories: Logs 64 38 Lumber, plywood, panels, fiberboard and engineered wood products 109 91 Other products 77 77 Materials and supplies 84 84 Total $ 445 $ 383 |
PENSION AND OTHER POSTRETIREM32
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Components of Net Periodic Benefit Costs | The components of net periodic benefit costs are: PENSION QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Service cost $ 10 $ 10 Interest cost 60 66 Expected return on plan assets (100 ) (102 ) Amortization of actuarial loss 61 55 Amortization of prior service cost 1 1 Total net periodic benefit cost - pension $ 32 $ 30 OTHER POSTRETIREMENT BENEFITS QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Interest cost $ 2 $ 2 Amortization of actuarial loss 2 2 Amortization of prior service credit (2 ) (2 ) Total net periodic benefit cost - other postretirement benefits $ 2 $ 2 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accrued Liabilities | Accrued liabilities were comprised of the following: DOLLAR AMOUNTS IN MILLIONS MARCH 31, DECEMBER 31, Accrued income taxes $ — $ 19 Customer rebates and volume discounts 32 48 Deferred income 31 48 Interest 84 111 Pension and other postretirement benefits 40 40 Product remediation accrual (Note 16) 43 98 Taxes – Social Security and real and personal property 27 24 Vacation pay 35 33 Wages, salaries and severance pay 86 150 Other 79 74 Total $ 457 $ 645 |
FAIR VALUE OF FINANCIAL INSTR34
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Estimated Fair Values and Carrying Values of Long-Term Debt | The estimated fair values and carrying values of our long-term debt consisted of the following: MARCH 31, DECEMBER 31, DOLLAR AMOUNTS IN MILLIONS CARRYING VALUE FAIR VALUE (LEVEL 2) CARRYING VALUE FAIR VALUE (LEVEL 2) Long-term debt (including current maturities) (1) : Fixed rate $ 5,704 $ 6,568 $ 5,768 $ 6,823 Variable rate 224 225 224 225 Total debt $ 5,928 $ 6,793 $ 5,992 $ 7,048 |
ACCUMLATED OTHER COMPREHENSIVE
ACCUMLATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Items included in accumulated other comprehensive loss | Changes in amounts included in our accumulated other comprehensive loss by component are: PENSION OTHER POSTRETIREMENT BENEFITS DOLLAR AMOUNTS IN MILLIONS Foreign currency translation adjustments Actuarial loss Prior service cost Actuarial loss Prior service credit Unrealized gains on available-for-sale securities Total Beginning balance as of December 31, 2017 $ 264 $ (1,802 ) $ (8 ) $ (48 ) $ 23 $ 9 $ (1,562 ) Other comprehensive income (loss) before reclassifications (15 ) 10 — — — — (5 ) Income taxes — (2 ) — — — — (2 ) Net other comprehensive income (loss) before reclassifications (15 ) 8 — — — — (7 ) Amounts reclassified from accumulated other comprehensive loss (1) — 61 1 2 (2 ) — 62 Income taxes — (16 ) — (1 ) — — (17 ) Net amounts reclassified from accumulated other comprehensive loss to earnings — 45 1 1 (2 ) — 45 Total other comprehensive income (loss) (15 ) 53 1 1 (2 ) — 38 Reclassification of certain tax affects due to tax law changes (2) — (245 ) (1 ) (12 ) 5 — (253 ) Reclassification of accumulated unrealized gains on available-for-sale securities (3) — — — — — (9 ) (9 ) Net amounts reclassified from accumulated other comprehensive loss to retained earnings — (245 ) (1 ) (12 ) 5 (9 ) (262 ) Ending balance as of March 31, 2018 $ 249 $ (1,994 ) $ (8 ) $ (59 ) $ 26 $ — $ (1,786 ) (1) Amortization of actuarial loss and prior service (cost) credit are components of net periodic benefit cost (credit). See Note 8: Pension and Other Postretirement Benefit Plans . (2) We reclassified certain tax affects from tax law changes of $253 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet in accordance with ASU 2018-02. See Note 1: Basis of Presentation . (3) We reclassified accumulated unrealized gains from available-for-sale securities of $9 million from "Accumulated other comprehensive loss" to "Retained earnings" on our Consolidated Balance Sheet in accordance with ASU 2016-01. See Note 1: Basis of Presentation . |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Share-based Compensation Activity | Share-based compensation activity in first quarter 2018 included the following: SHARES IN THOUSANDS Granted Vested Restricted Stock Units (RSUs) 673 576 Performance Share Units (PSUs) 344 110 |
Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted | Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2018 Performance Share Units Performance period 1/1/2018 – 12/31/2020 Valuation date average stock price (1) $34.14 Expected dividends 3.81% Risk-free rate 1.75 % – 2.34% Expected volatility 17.30 % – 21.52% (1) Calculated as an average of the high and low prices on grant date. |
CHARGES FOR INTEGRATION AND R37
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |
Items Included in Our Integration and Restructuring, Closure and Asset Impairment Charges | QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Integration and restructuring charges related to our merger with Plum Creek $ — $ 12 Charges related to closures and other restructuring activities 1 1 Impairments of long-lived assets 1 — Total charges for integration and restructuring, closures and asset impairments $ 2 $ 13 |
OTHER OPERATING COSTS, NET (Tab
OTHER OPERATING COSTS, NET (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Items Included in Other Operating Costs, Net | ITEMS INCLUDED IN OTHER OPERATING COSTS, NET QUARTER ENDED DOLLAR AMOUNTS IN MILLIONS MARCH 2018 MARCH 2017 Gain on disposition of nonstrategic assets $ (2 ) $ (7 ) Foreign exchange losses, net 2 3 Litigation expense, net 5 3 Other, net (1) 23 3 Total other operating costs, net $ 28 $ 2 |
BASIS OF PRESENTATION Additiona
BASIS OF PRESENTATION Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Reclassification of certain tax affects from tax law changes, 2018-02 | $ 253 |
Reclassification of accumulated unrealized gains on available-for-sale securities, ASU 2016-01 | 9 |
Adjustments for New Accounting Principle, Early Adoption | |
Reclassification of certain tax affects from tax law changes, 2018-02 | 253 |
Reclassification of accumulated unrealized gains on available-for-sale securities, ASU 2016-01 | $ 9 |
BUSINESS SEGMENTS Reconciliatio
BUSINESS SEGMENTS Reconciliation from Segment Totals to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Sales to unaffiliated customers | $ 1,865 | $ 1,693 |
Third party and intersegment revenue, net | 2,093 | 1,895 |
Net contribution to earnings | 392 | 280 |
Interest expense, net of capitalized interest | (93) | (99) |
Earnings before income taxes | 299 | 181 |
Income taxes | (30) | (24) |
Net earnings | 269 | 157 |
Intersegment eliminations | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Intersegment sales | (228) | (202) |
Operating segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net contribution to earnings | 484 | 346 |
Unallocated items | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net contribution to earnings | (92) | (66) |
Timberlands | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Sales to unaffiliated customers | 505 | 486 |
Intersegment sales | 228 | 202 |
Net contribution to earnings | 189 | 148 |
RE & ENR | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Sales to unaffiliated customers | 51 | 53 |
Net contribution to earnings | 25 | 26 |
Wood Products | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Sales to unaffiliated customers | 1,309 | 1,154 |
Net contribution to earnings | $ 270 | $ 172 |
OPERATIONS DIVESTED Additional
OPERATIONS DIVESTED Additional Details (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net gain on divestiture of business | $ 0 | |||
Charges for impairment of assets | $ 1 | $ 0 | ||
Uruguayan Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestiture of businesses | $ 403 | |||
Charges for impairment of assets | $ 147 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | $ 1,865 | $ 1,693 |
Timberlands | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 505 | 486 |
Timberlands | Delivered logs | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 462 | 420 |
Timberlands | Stumpage and pay-as-cut timber | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 15 | 12 |
Timberlands | Recreational and other lease revenue | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 14 | 14 |
Timberlands | Other products | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 14 | 40 |
Timberlands | West | Delivered logs | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 266 | 225 |
Timberlands | South | Delivered logs | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 157 | 148 |
Timberlands | North | Delivered logs | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 25 | 27 |
Timberlands | Other | Delivered logs | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 14 | 20 |
Timberlands | Domestic sales | West | Delivered logs | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 137 | 119 |
Timberlands | Export sales | West | Delivered logs | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 129 | 106 |
RE & ENR | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 51 | 53 |
RE & ENR | Real estate | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 34 | 37 |
RE & ENR | Energy and natural resources | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 17 | 16 |
Wood Products | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 1,309 | 1,154 |
Wood Products | Structural lumber | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 569 | 478 |
Wood Products | Engineered solid section | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 129 | 117 |
Wood Products | Engineered i-joists | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 78 | 73 |
Wood Products | Oriented strand board | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 232 | 203 |
Wood Products | Softwood plywood | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 50 | 44 |
Wood Products | Medium density fiberboard | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 43 | 47 |
Wood Products | Complementary building products | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | 137 | 122 |
Wood Products | Other products | ||
Revenue from External Customer [Line Items] | ||
Sales to unaffiliated customers | $ 71 | $ 70 |
NET EARNINGS PER SHARE Dilutive
NET EARNINGS PER SHARE Dilutive Potential Common Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic | 756,815 | 750,665 |
Dilutive potential common shares | 2,647 | 4,082 |
Diluted | 759,462 | 754,747 |
Stock options | ||
Dilutive potential common shares | 1,682 | 2,981 |
Restricted stock units | ||
Dilutive potential common shares | 569 | 547 |
Performance share units | ||
Dilutive potential common shares | 396 | 554 |
NET EARNINGS PER SHARE Potentia
NET EARNINGS PER SHARE Potential Shares Not Included in the Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares not included in the computation of diluted earnings per share | 1,301 | 1,432 |
Performance share units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares not included in the computation of diluted earnings per share | 744 | 568 |
NET EARNINGS PER SHARE Addition
NET EARNINGS PER SHARE Additional Information (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings per share, basic and diluted | $ 0.35 | $ 0.21 |
INVENTORIES Inventories (Detail
INVENTORIES Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Total | $ 445 | $ 383 |
Logs | ||
Inventory [Line Items] | ||
LIFO inventories | 19 | 17 |
FIFO or moving average cost inventories | 64 | 38 |
Lumber, plywood, panels, and fiberboard | ||
Inventory [Line Items] | ||
LIFO inventories | 76 | 66 |
Lumber, plywood, panels and engineered wood products | ||
Inventory [Line Items] | ||
FIFO or moving average cost inventories | 109 | 91 |
Other products | ||
Inventory [Line Items] | ||
LIFO inventories | 16 | 10 |
FIFO or moving average cost inventories | 77 | 77 |
Materials and supplies | ||
Inventory [Line Items] | ||
FIFO or moving average cost inventories | $ 84 | $ 84 |
INVENTORIES Additional informat
INVENTORIES Additional information (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Increase in inventory amount if FIFO would have been used | $ 70 | $ 70 |
SPECIAL-PURPOSE ENTITIES Additi
SPECIAL-PURPOSE ENTITIES Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
SPE Transaction | ||
SPE short-term notes | $ 209 | $ 209 |
SPE restricted financial investments | 253 | $ 0 |
Buyer-sponsored SPEs | ||
SPE Transaction | ||
SPE restricted financial investments | $ 253 | |
Investment maturity date | Mar. 31, 2019 | |
Monetization SPEs | ||
SPE Transaction | ||
SPE short-term notes | $ 209 | |
Debt instrument, maturity date | Dec. 31, 2018 |
PENSION AND OTHER POSTRETIREM49
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Components of Net Periodic Benefit Costs (Credits) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 10 | $ 10 |
Interest cost | 60 | 66 |
Expected return on plan assets | (100) | (102) |
Amortization of actuarial loss | 61 | 55 |
Amortization of prior service cost | 1 | 1 |
Total net periodic benefit cost | 32 | 30 |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 2 | 2 |
Amortization of actuarial loss | 2 | 2 |
Amortization of prior service cost | (2) | (2) |
Total net periodic benefit cost | $ 2 | $ 2 |
PENSION AND OTHER POSTRETIREM50
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Additional Information (Details) $ in Millions | Mar. 31, 2018USD ($) |
U.S. and Canadian Other Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2018 | $ 19 |
Registered Canadian Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2018 | 23 |
Non Registered Canadian Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2018 | 4 |
U.S. Non-Qualified Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2018 | 19 |
U.S. Qualified Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to benefit plans during 2018 | $ 0 |
ACCRUED LIABILITIES Accrued Lia
ACCRUED LIABILITIES Accrued Liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued income taxes | $ 0 | $ (19) |
Customer rebates and volume discounts | 32 | 48 |
Deferred income | 31 | 48 |
Interest | 84 | 111 |
Pension and other postretirement benefits | 40 | 40 |
Product remediation accrual (Note 16) | 43 | 98 |
Taxes – Social Security and real and personal property | 27 | 24 |
Vacation pay | 35 | 33 |
Wages, salaries and severance pay | 86 | 150 |
Other | 79 | 74 |
Total | $ 457 | $ 645 |
LONG-TERM DEBT AND LINES OF C52
LONG-TERM DEBT AND LINES OF CREDIT Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
line of credit expiration date | Mar. 31, 2022 | |
Line of credit, maximum borrowing capacity | $ 1,500 | |
Revolving line of credit, outstanding balance | $ 0 | |
Prior Credit Facility | ||
line of credit expiration date | Sep. 30, 2018 | |
Line of credit, maximum borrowing capacity | $ 1,000 | |
7.00 Debenture [Member] | ||
Repayments of debt | $ 62 |
FAIR VALUE OF FINANCIAL INSTR53
FAIR VALUE OF FINANCIAL INSTRUMENTS Estimated Fair Values and Carrying Values of Long-Term Debt (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | $ 5,928 | $ 5,992 |
Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | 6,793 | 7,048 |
Fixed interest rate | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | 5,704 | 5,768 |
Fixed interest rate | Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | 6,568 | 6,823 |
Variable interest rate | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, including current maturities | 224 | 224 |
Variable interest rate | Fair Value, Inputs, Level 2 | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Line Items] | ||
Long-term debt, fair value | $ 225 | $ 225 |
LEGAL PROCEEDINGS, COMMITMENT54
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Line Items] | |||
Environmental remediation expense | $ 28 | ||
Accrued estimated remediation costs | 72 | ||
Asset retirement obligations | 34 | ||
Insurance recoveries | 20 | $ 0 | |
Wood Products | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Charges for product remediation | $ 290 | ||
Insurance recoveries | $ 20 |
ACCUMLATED OTHER COMPREHENSIV55
ACCUMLATED OTHER COMPREHENSIVE LOSS Items Included in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Beginning balance | $ (1,562) | |
Other comprehensive income (loss) before reclassifications | (5) | |
Income taxes | (2) | |
Net other comprehensive income (loss) before reclassifications | (7) | |
Amounts reclassified from accumulated other comprehensive loss(1) | 62 | |
Income taxes | (17) | |
Net amounts reclassified from accumulated other comprehensive loss to earnings | 45 | |
Total other comprehensive income | 38 | $ 31 |
Reclassification of certain tax affects due to tax law changes(2) | (253) | |
Reclassification of accumulated unrealized gains on available-for-sale securities(3) | (9) | |
Reclassification from accumulated other comprehensive income (loss) to retained earnings | 262 | |
Ending balance | (1,786) | |
Foreign currency translation adjustments | ||
Beginning balance | 264 | |
Other comprehensive income (loss) before reclassifications | (15) | |
Income taxes | 0 | |
Net other comprehensive income (loss) before reclassifications | (15) | |
Amounts reclassified from accumulated other comprehensive loss(1) | 0 | |
Income taxes | 0 | |
Net amounts reclassified from accumulated other comprehensive loss to earnings | 0 | |
Total other comprehensive income | (15) | |
Reclassification of certain tax affects due to tax law changes(2) | 0 | |
Reclassification of accumulated unrealized gains on available-for-sale securities(3) | 0 | |
Reclassification from accumulated other comprehensive income (loss) to retained earnings | 0 | |
Ending balance | 249 | |
Actuarial losses | Pension | ||
Beginning balance | (1,802) | |
Other comprehensive income (loss) before reclassifications | 10 | |
Income taxes | (2) | |
Net other comprehensive income (loss) before reclassifications | 8 | |
Amounts reclassified from accumulated other comprehensive loss(1) | 61 | |
Income taxes | (16) | |
Net amounts reclassified from accumulated other comprehensive loss to earnings | 45 | |
Total other comprehensive income | 53 | |
Reclassification of certain tax affects due to tax law changes(2) | (245) | |
Reclassification of accumulated unrealized gains on available-for-sale securities(3) | 0 | |
Reclassification from accumulated other comprehensive income (loss) to retained earnings | 245 | |
Ending balance | (1,994) | |
Actuarial losses | Other Postretirement Benefits | ||
Beginning balance | (48) | |
Other comprehensive income (loss) before reclassifications | 0 | |
Income taxes | 0 | |
Net other comprehensive income (loss) before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss(1) | 2 | |
Income taxes | (1) | |
Net amounts reclassified from accumulated other comprehensive loss to earnings | 1 | |
Total other comprehensive income | 1 | |
Reclassification of certain tax affects due to tax law changes(2) | (12) | |
Reclassification of accumulated unrealized gains on available-for-sale securities(3) | 0 | |
Reclassification from accumulated other comprehensive income (loss) to retained earnings | 12 | |
Ending balance | (59) | |
Prior service (costs) credits | Pension | ||
Beginning balance | (8) | |
Other comprehensive income (loss) before reclassifications | 0 | |
Income taxes | 0 | |
Net other comprehensive income (loss) before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss(1) | 1 | |
Income taxes | 0 | |
Net amounts reclassified from accumulated other comprehensive loss to earnings | 1 | |
Total other comprehensive income | 1 | |
Reclassification of certain tax affects due to tax law changes(2) | (1) | |
Reclassification of accumulated unrealized gains on available-for-sale securities(3) | 0 | |
Reclassification from accumulated other comprehensive income (loss) to retained earnings | 1 | |
Ending balance | (8) | |
Prior service (costs) credits | Other Postretirement Benefits | ||
Beginning balance | 23 | |
Other comprehensive income (loss) before reclassifications | 0 | |
Income taxes | 0 | |
Net other comprehensive income (loss) before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss(1) | (2) | |
Income taxes | 0 | |
Net amounts reclassified from accumulated other comprehensive loss to earnings | (2) | |
Total other comprehensive income | (2) | |
Reclassification of certain tax affects due to tax law changes(2) | 5 | |
Reclassification of accumulated unrealized gains on available-for-sale securities(3) | 0 | |
Reclassification from accumulated other comprehensive income (loss) to retained earnings | (5) | |
Ending balance | 26 | |
Unrealized gains on available-for-sale securities | ||
Beginning balance | 9 | |
Other comprehensive income (loss) before reclassifications | 0 | |
Income taxes | 0 | |
Net other comprehensive income (loss) before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss(1) | 0 | |
Income taxes | 0 | |
Net amounts reclassified from accumulated other comprehensive loss to earnings | 0 | |
Total other comprehensive income | 0 | |
Reclassification of certain tax affects due to tax law changes(2) | 0 | |
Reclassification of accumulated unrealized gains on available-for-sale securities(3) | (9) | |
Reclassification from accumulated other comprehensive income (loss) to retained earnings | 9 | |
Ending balance | $ 0 |
SHARE-BASED COMPENSATION Schedu
SHARE-BASED COMPENSATION Schedule of Share-Based Compensation Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2018shares | |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted | 673 |
Vested | 576 |
Performance share units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted | 344 |
Vested | 110 |
SHARE-BASED COMPENSATION Weight
SHARE-BASED COMPENSATION Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted (Details) - Performance share units | 3 Months Ended |
Mar. 31, 2018$ / sharesRate | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Valuation date average stock price (1) | $ / shares | $ 34.14 |
Expected dividends | 3.81% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance period | 1/1/2018 |
Risk-free rate minimum | 1.75% |
Expected volatility minimum | 17.30% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance period | 12/31/2020 |
Risk-free rate maximum | 2.34% |
Expected volatility maximum | 21.52% |
SHARE-BASED COMPENSATION Additi
SHARE-BASED COMPENSATION Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued during period | 1,500,000 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of units granted | $ 34.14 | |
Granted | 673,000 | |
Performance share units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of units granted | $ 35.49 | |
Granted | 344,000 | |
Performance share units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Final number of shares awarded of each grant's target | 0.00% | |
Performance share units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Final number of shares awarded of each grant's target | 150.00% | |
Value management awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target level vesting rate | $ 100 |
CHARGES FOR INTEGRATION AND R59
CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS Items Included in Our Integration and Restructuring, Closure and Asset Impairment Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Charges related to integration and restructuring | ||
Impairments of long-lived assets | $ 1 | $ 0 |
Total charges for integration and restructuring, closures and asset impairments | 2 | 13 |
Plum Creek | ||
Charges related to integration and restructuring | ||
Integration and restructuring charges related to our merger with Plum Creek | 0 | 12 |
Other | ||
Charges related to integration and restructuring | ||
Charges related to closures and other restructuring activities | $ 1 | $ 1 |
CHARGES (RECOVERIES) FOR PROD60
CHARGES (RECOVERIES) FOR PRODUCT REMEDIATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Line Items] | |||
Product remediation accrual | $ 43 | $ 98 | |
Insurance recoveries | 20 | $ 0 | |
Wood Products | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Charges for product remediation | $ 290 | ||
Charges for product remediation, payments | 247 | ||
Product remediation accrual | 43 | ||
Insurance recoveries | $ 20 |
OTHER OPERATING COSTS, NET Item
OTHER OPERATING COSTS, NET Items Included in Other Operating Costs, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Gain on disposition of nonstrategic assets | $ (2) | $ (7) |
Foreign exchange losses, net | 2 | 3 |
Litigation expense, net | 5 | 3 |
Other, net(1) | 23 | 3 |
Total other operating costs, net | $ 28 | $ 2 |
INCOME TAXES Additional Informa
INCOME TAXES Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Estimated annual effective tax rate for our Taxable REIT Subsidiary | 24.00% | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% |
Tax affect of U.S. Corporate rate change | $ 74,000,000 | |
Gain from potential tax adjustment | $ 600,000,000 | |
Tax liability from potential adjustment | 100,000,000 | |
Estimated Litigation Liability | $ 0 | |
Maximum | ||
Percentage of gain distributed in common stock | 80.00% |